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Recycling panel surprised by $11M fund transfer

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Members of a state panel that oversees funding used to attract recycling companies to Indiana expressed shock Thursday that state budget officials recently shifted $11 million from the recycling fund to the state’s main checking account.

State Sen. Jean Breaux, D-Indianapolis, said she and other members of the Recycling Market and Development Board were “blind-sided” by the transfer, which occurred June 30.

The panel’s members, who didn’t learn of the transfer until they met Thursday for a regularly scheduled meeting, grilled a state environmental official about why the board wasn’t consulted or told before it happened.

“What’s the point of having this board if we don’t have any input into the outcome of the decisions that affect the very product we’re supposed to be overseeing?” asked Breaux, a nonvoting board member.

The transfer, which left about $5.4 million in the recycling fund, was used to help alleviate the state’s revenue shortfall, said Rick Bossingham, an official with the Indiana Department of Environmental Management.

Bossingham, the assistant commissioner of IDEM’s Office of Pollution Prevention and Technical Assistance, said the state’s Office of Management and Budget made the transfer without consulting IDEM as part of efforts by Gov. Mitch Daniels’ administration to help cover the state’s revenue shortfall. He said the money would not be returned to the fund.

The fund transfer came eight months after IDEM, citing the lingering recession, froze the money in the fund fed by fees trash haulers pay at the state’s landfills.

The recycling board awards the money in grants or loans to recycling businesses seeking to locate or expand their operations in Indiana.

Although some board members said they thought the transferred money was set aside solely for recycling loans or grants, Bossingham said state law allows budget officials to tap the funds in lean times.

“Everybody knows that this is an economic time where tough decisions have to be made,” he said.

Rep. Mara Candelaria Reardon said she was troubled by the transfer.

“I just feel like the Legislature directed these funds for a specific purpose and this completely goes against legislative intent,” said Reardon, D-Hammond, another nonvoting board member.

Daniels’ budget director, Christopher Ruhl, said in a statement that a similar transfer occurred in 2003 under Gov. Frank O’Bannon. He added that “the potential for cuts in this program were well known more than seven months ago.”

But Board chairman Bruce Burrow said he and the other board members were never told the money would be moved.

“Obviously they have the right to do that, the ability to do that, but the communication factor was lacking and that’s most disconcerting, as is what’s going to happen in the future as the funds continue to grow,” he said.

Burrow asked Bossingham if IDEM could re-examine the possibility of releasing $1.3 million the board awarded in December to three companies, which between them planned to bring about 60 new jobs to Indiana.

“That’s what sticks in my craw the most,” Burrow said. “We’re sitting on $5 million and we’ve committed $1.3 million but we still can’t allocate those funds.”

Bossingham said he would pass on the new request but the fund remains frozen indefinitely.

Jeffrey Miller, a board member and president of the Indiana Recycling Coalition, said the state’s decisions regarding the funds send “a bad signal” to recycling companies that might be interested in locating in Indiana.

© 2009 Associated Press. Displayed by permission. All rights reserved.

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